What Makes a Market Transaction Morally Repugnant?
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What makes a market transaction morally repugnant? Christina Leuker Robert Koch-Institute, Max Planck Institute for Human Development Lasare Samartzidis, & Ralph Hertwig Max Planck Institute for Human Development February 19, 2021 Word count: 8612 Abstract Many people find it morally impermissible to put kidneys, jury duty exemp- tions, or permits for having children on the free market. All of these are examples of repugnant transactions—market transactions that third parties want to prevent. In two studies (N = 1,554), using respondents’ judge- ments of 51 different market transactions across 21 characteristics, we show that repugnance can be decomposed into five higher-order dimensions: moral outrage, need for regulation, incommensurability, exploitation, and unknown risk. Repugnance toward the 51 market transactions was highly consistent across two samples. Our results can help identify mismatches between public sentiments and current regulations (selling carbon emissions is currently legal but considered repugnant), anticipate responses to novel markets that have not been publicly scrutinized (often arising from technological advances, such as markets for “designer babies”), and help design less repugnant markets (e.g., by making the risks involved in a transaction known to sellers). Keywords: repugnant transactions, moral judgments, market transactions, factor analysis, policy making Data and analysis code can be retrieved via osf.io/efzsm. PSYCHOLOGY OF REPUGNANCE 2 Dwarf tossing is a pub game in which contestants compete to throw people with dwarfism as far as possible. In many countries, human rights organisations have lobbied for dwarf tossing to be banned, arguing that it violates human dignity by objectifying people with dwarfism and that it represents a risk to those being tossed (CBC, 2012). Dwarf tossing is an instance of a repugnant transaction (Roth, 2007). Repugnant transactions are market exchanges that third parties want to prevent (Roth, 2007) out of moral concerns.1 Repugnance is associated with a strong opposition to certain markets—stronger than an opposition to transactions that could be called “distaste- ful, inappropriate, unfair, undignified, or unprofessional” (Roth, 2007, p. 40). Repugnance has been observed in many domains, including prostitution, escort services, and the pur- chase and sale of human organs. Life insurance—the idea of setting a price on one’s life, and then placing a bet on one’s date of death—was initially considered repugnant (Zelizer, 1979; Roth, 2007). Some transactions have been classified as “taboo tradeoffs” (Fiske & Tetlock, 1997; Tetlock, 2003) because people are unwilling or unable to compare the rel- ative importance of secular values such as money, time, and convenience with values that have infinite or transcendent significance, such as love, honour, and justice. This may lead people to not only oppose particular transactions between third parties, but also refuse to take part in certain markets themselves. Repugnance can be a “constraint on markets and how they are designed” (Roth, 2007, p. 40). For instance, many people find the thought of kidneys being sold on the free market repugnant (Roth, 2015). At the same time, in many countries patients may wait for years for a transplant because too few people are willing to donate kidneys. Monetary compensation may solve the problem: Within 11 years, Iran—the only country that allows kidneys to be sold on the free market—had virtually eliminated its waiting list for kidney transplants (Ghods & Savaj, 2006; Hammond, 2018), though evidence is not unequivocal (Rouchi et al., 2014). Perhaps monetary incentives are stronger motivators than altruism (Lacetera, 2017). And yet, every country in the world but one bans the sale of kidneys on the free market. There is an immediate tension between “the efficiency enhancing effects of trades mediated by a monetary price and the moral opposition to the provision of these 1We added “moral concerns” to Roth’s (2007) definition because people may want to prevent market transactions for economic reasons (e.g., competitors). The present research in part informs the definition of “repugnance” itself (see the Discussion section.) PSYCHOLOGY OF REPUGNANCE 3 prices” (Lacetera, 2017, p. 14). Note, however, that involving money in a transaction may backfire for reasons other than moral opposition: People who register to donate an organ for altruistic reasons may be unwilling to register if money is involved, since financial incentives can undermine—or, “crowd out”—existing intrinsic motivations (Frey & Oberholzer-Gee, 1997; Frey & Jegen, 2001). When and why do people want to restrict certain transactions? Feelings of repugnance vary across cultures and countries. For instance, prostitution is illegal in the US but legal in Germany, while surrogate motherhood is illegal in Germany but legal in the US. Slaughtering and selling cows is prohibited in most states in India, but in most other countries it is not given a second thought. Feelings of repugnance can also vary across time; for instance, alcohol, gambling, and life insurance were once considered repugnant but are now mostly accepted. Finally, feelings of repugnance can vary strongly across individuals even within the same country or culture: Some people find a kidney market perfectly acceptable while others do not (Roth, 2007), and people with dwarfism disagree on whether dwarf tossing is acceptable. In short, “repugnance is hard to predict” (Roth, 2007, p. 42). Whereas prior qualitative research has compared and contrasted a variety of trans- actions and sought to explain what makes some transactions more repugnant than others (Roth, 2015, 2007; Satz, 2010; Sandel, 2013, 2012), extant quantitative research has, by and large, focused on research questions that concern specific transactions, such as how the acceptability of kidney donations changes as a function of the architecture of the particular transaction (e.g., the amount or form of payment). Apart from kidney donations (Decker et al., 2008; Elias et al., 2016; Niederle & Roth, 2014; Querido et al., 2019) and organ dona- tions more generally (Rodrigue et al., 2009), empirical research has also scrutinized clinical trials (Ambuehl et al., 2015; Leuker et al., 2020), blood donations (Goette & Stutzer, 2020; Lee et al., 1999) and other transactions (see next section for details). However, quantitative research into the underlying psychological dimensions that shape feelings of repugnance is still scant. A clearer understanding of those dimensions would make it possible to determine similarities and dissimilarities between transactions by focusing on their “deep grammar” rather than their surface features. For instance, people may feel repugnance in response to any market transaction that involves largely unknown risks, such as selling organs or selling cocaine, even though on the surface they are two very different undertakings. Un- derstanding how and why people respond to certain types of market transactions can also PSYCHOLOGY OF REPUGNANCE 4 provide new entry points for policy intervention. For instance, if the main driver of public repugnance toward a transaction is exploitation of disadvantaged individuals, an effective policy response may have little in common with a policy for a transaction in which unknown risk is the main cause of repugnance. In one case the policy may be geared toward pro- tecting vulnerable people, while in the other, the policy may focus on reducing and clearly communicating potential risks. In addition, policy makers who can identify the underlying dimensions of transactions that evoke strong opposition may be in a better position to an- ticipate responses to newly emerging markets and to recognize sensitive issues that require regulation. This is important, given that recent technological and scientific advances have often outpaced public scrutiny: Consider, for instance, algorithms that aim to predict an individual’s sexual orientation (Wang & Kosinski, 2018) or life expectancy (Briseño, 2018); insects processed for human consumption (Premalatha et al., 2011); tests for trisomies 21, 18, or 13 in fetuses (Quezada et al., 2015); gender selection and “designer babies” (Ball, 2018; Hercher, 2018); or the purchase and sale of autonomic weapons (Rahwan et al., 2019). Here, we study the extent to which repugnance is quantifiable and predictable across 51 diverse transactions that are or have been considered repugnant. Respondents initially judged these transactions on 25 characteristics identified in the literature. Using these judg- ments, we applied a psychometric approach previously used by Slovic (1987) to understand how people think about, and respond to, a variety of risks, including handguns, fossil fuels, and vaccines. In Slovic’s study, participants judged a number of risky activities and com- modities on a range of characteristics that were then statistically combined into higher-order dimensions using a factor analysis. Those, in turn, were predictive of people’s attitudes to- ward regulation of the risks. Following this approach, we also aim to identify the underlying dimensions crucial in people’s judgments of repugnant transactions—the deep grammar of repugnant transactions. We do so in two independent studies (N = 1, 554). In Study 1, we had no prior expectations on the number of relevant higher-order dimensions that would emerge, and thus ran an exploratory factor analysis. In Study 2, we preregistered the ex- pected number of factors based on the results obtained